The End Of Myspace?

On the Internet when it comes to social networking sites, fads come and go. We saw this in Friendster as that user group quickly switched over to Myspace. Let's face it, people get tired of the same old thing. When it comes to social networking sites, being everything to everyone just doesn't work.

Giving away something for free and trying to find another way to monetize your existence is a drunken sailors crap shoot. Searching for something that just isn't there is a terrible way to run a company. When sites like these mature, they quickly find that their strategy switches to a means of keeping visitors, rather than trying to offer value that would want to keep them there. The problem is, the value is in the eye of the beholder. And when you give away something free, people continue to expect it.

Below is a chart showing the comparison in reach between Myspace and Facebook. As one can see, Myspace is spiraling downhill to what will likely be its eventual death.

When Facebook overtook Myspace in 2008, a loud groan could be heard from News Corporation offices. Back in 2005 Myspace was purchased by Rupert Murdoch's company for $580 million. A year later Google inked a $980 million deal to place text ads and ae search box on the site. All good in the name of profits.

But the 3 year deal is set to expire in second quarter of 2010. Myspace more than ever will be fighting for its life. Its highly unlikely Google will ink another deal with Myspace of such a massive size. Given Myspace has been losing visitor traffic to Facebook why should they. Its pretty clear to me that social networking advertisements do not target well. Its even more clear to me that Google simply overpaid for that right. Where they screwed up is that people aren't there to click on ads - their frame of mind is focused on socializing. Not only that but capturing user activity and studying their movement from page to page on the site as well as collecting user profile information was a bad move. Most kids today know about the issue of privacy and place bogus information into their profiles. Even if you could track a user starting at Myspace and watching them move to other sites, how do you now the person is real? And just how is knowing what a person likes and dislikes directly related to get them to click on advertisements?

When people are actively looking for something, I would say that is when the click through rates on advertisements are high. Bombarding them with ads when they want to socialize, read news, send email, etc. is more of a turnoff and training someone to actually hate ads altogether. Ask yourself how many ads have you clicked on the Internet the past year and I bet that number is less than a dozen.

Social networking sites such as Myspace, Facebook and Twitter wont survive in the long run. Unless you have a website that caters to a consumer brand offering goods or services, these types of sites are wasting their time accumulating massive numbers. They exist solely to lure in investors and pump their prices up based on a story. Sorry, but those stories aren't good enough anymore. Especially when people who were burned back in the Dot Com days now know that if an Internet company cannot prove to make money, people simply won't buy into it. No profitable business model, no chance for soaring stock prices. Seriously.

Having been a user of Myspace since 2005, there is really nothing new coming out that interests me. Spamming continues in inboxes and comment fields. Fake profiles continue to be a problem. But most importantly, the sense of friendship has died and growing old. Myspace has and continues to be a social network site full of superficialities. A virtual friend is not the same as a friend. Somehow, people have dillusioned into thinking they are both the same thing. Not so.

If anything, Myspace is an immature site fit more for the high school kids trying to make false impressions. With a demographic like that, good luck trying to get kids to whip out a credit card to purchase goods/services, let alone click on ads from advertisers who will benefit directly from it.

This leads me to the conclusion that the fate of Myspace will be no different than Friendster - dead. The only Myspace users who will stick around are those who can't find a way to get away from it - mostly from bad habit.